TIDMLAHL TIDMLAHW
RNS Number : 3271R
Landscape Acquisition Holdings Ltd
27 February 2019
LANDSCAPE ACQUISITION HOLDINGS LIMITED
ANNUAL FINANCIAL REPORT
Landscape Acquisition Holdings Limited has today published its
report and audited financial statements from incorporation on 1
November 2017 to 31 October 2018 ("Annual Financial Report"). The
Annual Financial Report will shortly be available at
www.landscapeacquisitionholdingslimited.com.
In compliance with Listing Rule 14.3.6, a copy of the Annual
Financial Report will also shortly be submitted to the National
Storage Mechanism and will be available for inspection at
www.morningstar.co.uk/uk/NSM.
Landscape Acquisition Holdings Limited
Report and Financial Statements
For the Year Ended 31 October 2018
Directors' Statement
It is with pleasure that I present to you the shareholders the
report and audited financial statements of Landscape Acquisition
Holdings Limited (the "Company") for the year ended 31 October
2018.
The Company
On 20 November 2017, the Company completed its initial public
offering. The offering raised gross proceeds of US$500 million,
consisting of US$484 million through the placement of ordinary
shares ("Ordinary Shares") with matching warrants ("Warrants") at a
placing price of US$10.00 per Ordinary Share and a further US$16
million through the subscription of 1,600,000 preferred shares
("Founder Preferred Shares") (with Warrants being issued to the
subscribers of Founder Preferred Shares on the basis of one Warrant
per Founder Preferred Share) also at US$10 per Founder Preferred
Share. The Company was admitted to trading with a standard listing
on the main market of the London Stock Exchange on 20 November 2017
("Admission"). The net proceeds from the IPO and the subscription
of the Founder Preferred Shares are easily accessible when
required.
As set out in the Company's prospectus dated 15 November 2017
(the "Prospectus"), the Company was formed to undertake an
acquisition of a target company or business. There is no specific
expected target value for the acquisition and the Company expects
that any funds not used for the acquisition will be used for future
acquisitions, internal or external growth and expansion, purchase
of outstanding debt and working capital in relation to the acquired
company or business. Following completion of the acquisition, the
objective of the Company is expected to be to operate the acquired
business and implement an operating strategy with a view to
generating value for shareholders through operational improvements
as well as potentially through additional complementary
acquisitions following the acquisition.
The Board of Directors continues to review a number of
acquisition targets and will remain disciplined in only proceeding
with an acquisition that it believes can produce attractive returns
to the Company's shareholders.
Financial Results
For the year ended 31 October 2018, the Company incurred
operating costs of US$64.1 million, including US$7.7 million of
administrative expenses, US$55.9 million of non-cash charges
related to Founder Preferred Share dividend rights and US$0.5
million of non-cash charges related to warrant redemption
liability, as outlined in the Company's Prospectus. These expenses
were partially offset by net investment income totalling
approximately US$7.3 million. Costs of Admission of US$9.7 million
were recorded as an offset to the gross proceeds from the IPO in
the Company's Statement of Financial Position.
Principal Risks and Uncertainties
The Company set out in the Prospectus the principal risks and
uncertainties that could impact its performance; these principal
risks and uncertainties remain unchanged since that document was
published and apply in the year ended 31 October 2018. Your
attention is drawn to that Prospectus for the detailed
assessment.
A copy of the Prospectus is available on the Company's website
(www.landscapeacquisitionholdingslimited.com) and has been
submitted to the National Storage Mechanism and is available for
inspection at www.morningstar.co.uk/uk/nsm.
Related Parties
Related party disclosures are given in note 14 to these
financial statements.
Noam Gottesman
Director
13 February 2019
Report of the Directors
The financial statements were approved by the Board of Directors
on 13 February 2019 and signed on its behalf by Lord Myners of
Truro CBE.
The Directors have pleasure in submitting their Report and the
audited financial statements for the year ended 31 October
2018.
Status and activities
The Company was incorporated with limited liability under the
laws of the British Virgin Islands under the BVI Companies Act on 1
November 2017. The address of the Company's registered office is
Ritter House, Wickhams Cay II, Road Town, Tortola, VG1110, British
Virgin Islands. As at 31 October 2018, the Company had 48,425,000
Ordinary Shares in issue.
As set out in the Prospectus, the Company was formed to
undertake an acquisition of a target company ("Acquisition"). There
is no specific expected target value for the Acquisition and the
Company expects that any funds not used for the Acquisition will be
used for future acquisitions, internal or external growth and
expansion, purchase of outstanding debt and working capital in
relation to the acquired company or business. Following completion
of the Acquisition, the objective of the Company is expected to be
to operate the acquired business and implement an operating
strategy with a view to generating value for shareholders through
operational improvements as well as potentially through additional
complementary acquisitions following the Acquisition.
Following the Acquisition, the Company intends to seek
re-admission of the enlarged group to listing on the Official List
and to trading on the London Stock Exchange or admission to an
alternative stock exchange. The Company expects to acquire a
controlling interest in a target company or business. The Company
(or its successor) may consider acquiring a controlling interest
constituting less than the whole voting control or less than the
entire equity interest in a target company or business if such
opportunity is attractive; provided, the Company (or its successor)
would acquire a sufficient portion of the target entity such that
it could consolidate the operations of such entity for applicable
financial reporting purposes. In connection with anAcquisition, the
Company may issue additional Ordinary Shares which could result in
the Company's then existing Shareholders owning a minority interest
in the Company following the Acquisition.
The Company's efforts in identifying a prospective target
company or business are not limited to a particular industry or
geographic region. However, given the experience of the Founders,
the Company expects to focus on acquiring an operating company or
business with a real estate component (such as a business within
the hospitality, lodging, gaming, real estate or property services
or asset management industries) with either all or a substantial
portion of its activities in North America or Europe. The Company
may seek to raise further capital for the purposes of the
Acquisition.
Unless required by applicable law or other regulatory process,
no Shareholder approval will be sought by the Company in relation
to the Acquisition. The Acquisition will be subject to Board
approval, including by a majority of the Company's Non-Founder
Directors (as defined in the Prospectus).
The determination of the Company's post-Acquisition strategy and
whether any of the Directors will remain with the combined company
and on what terms will be made at or prior to the time of the
Acquisition.
If the Acquisition has not been announced by the second
anniversary of Admission, the Board will recommend to shareholders
either that the Company be wound up (in order to return capital to
shareholders and holders of the Founder Preferred Shares, to the
extent assets are available) or that the Company continue to pursue
the Acquisition for a further 12 months from the second anniversary
of Admission. The Board's recommendation will then be put to a
shareholder vote (from which the Directors and each of Toms
Acquisition II LLC and Imperial Landscape Sponsor LLC (together,
the "Founder Entities") will abstain).
The Company has identified the following criteria and guidelines
that it believes are importantin evaluating potential acquisition
opportunities. It will generally use these criteria and guidelines
in evaluating acquisition opportunities. However, it may also
decide to enter into the Acquisition of a target company or
business that does not meet these criteria and guidelines:
-- financial condition and results of operations;
-- growth potential;
-- brand recognition and potential;
-- experience and skill of management and availability of
additional personnel;
-- capital requirements;
-- stage of development of the business and its products or
services;
-- existing distribution or other sales arrangements and the
potential for expansion;
-- degree of current or potential market acceptance of the
products or services;
-- proprietary aspects of products and the extent of
intellectual property or other
protection for products or formulas;
-- impact of regulation and potential future regulation on the
business;
-- regulatory environment of the industry;
-- seasonal sales fluctuations and the ability to offset these
fluctuations through
other acquisitions, introduction of new products, or product
line extensions; and
-- the amount of working capital available.
Results and dividends
For the year ended 31 October 2018, the Company's loss was
$56,631,341.
It is the Company's policy that no dividends will be declared
until after the Acquisition.
The Company's current intention is to retain any earnings for
use in its business operations, and the Company does not anticipate
declaring any dividends in the foreseeable future. The Company will
only pay dividends to the extent that to do so is in accordance
with all applicable laws.
Share capital
General:
As at 31 October 2018, the Company had in issue 48,425,000
Ordinary Shares and 1,600,000 Founder Preferred Shares.
2 Founder Preferred Shares were issued on 3 November 2017 at
US$10.00 per share and a further 1,599,998 issued on 14 November
2017, also at US$10.00 per share. There are no Founder Preferred
Shares held in Treasury. Each Founder Preferred Share was issued
with a Warrant as described in note 11.
48,425,000 Ordinary Shares were issued on 20 November 2017
(48,400,000 were issued in the IPO at US$10.00 per share and 25,000
were issued to the Non-Founder Directors in conjunction with the
IPO). There are no Ordinary Shares held in Treasury. Each Ordinary
Share was issued with a Warrant as described in note 11.
Founder Preferred Shares:
Details of the Founder Preferred Shares can be found in note 11
to the financial statements, and are incorporated into this Report
by reference.
Securities carrying special rights:
Save as disclosed above in relation to the Founder Preferred
Shares, no person holds securities in the Company carrying special
rights with regard to control of the Company.
Voting rights:
Holders of Ordinary Shares and Founder Preferred Shares have the
right to receive notice of and to attend and vote at any meetings
of members except, in the case of the holders of Ordinary Shares,
in relation to any Resolution of Members that the Directors, in
their absolute discretion (acting in good faith) determine is
necessary or desirable: (i) in connection with a merger or
consolidation in relation to, in connection with or resulting from
the Acquisition (including at any time after the Acquisition has
been made); or (ii) to approve matters in relation to, in
connection with or resulting from the Acquisition (whether before
or after the Acquisition has been made). Each holder of shares
being present in person or by proxy at a meeting will, upon a show
of hands, have one vote and upon a poll each such holder of shares
present in person or by proxy will have one vote for each share
held by him.
In the case of joint holders of a share, if two or more persons
hold shares jointly each of them may be present in person or by
proxy at a meeting of members and may speak as a member, and if one
or more joint holders are present at a meeting of persons, in
person or by proxy, they must vote as one.
Restrictions on voting:
No member shall, if the Directors so determine, be entitled in
respect of any share held by him to attend or vote (either
personally or by proxy) at any meeting of members or separate class
meeting of the Company or to exercise any other right conferred by
membership in relation to any such meeting if he or any other
person appearing to be interested in such shares has failed to
comply with a notice requiring the disclosure of shareholder
interests and given in accordance with the Company's articles of
association (the "Articles") within 14 calendar days, in a case
where the shares in question represent at least 0.25% of their
class, or within seven days, in any other case, from the date of
such notice. These restrictions will continue until the information
required by the notice is supplied to the Company or until the
shares in question are transferred or sold in circumstances
specified for this purpose in the Articles.
Transfer of shares:
Subject to the BVI Business Companies Act and the terms of the
Articles, any member may transfer all or any of his certificated
shares by an instrument of transfer in any usual form or in any
other form which the Directors may approve. The Directors may
accept such evidence of title of the transfer of shares (or
interests in shares) held in uncertificated form (including in the
form of depositary interests or similar interests, instruments or
securities) as they shall in their discretion determine. The
Directors may permit such shares or interests in shares held in
uncertificated form to be transferred by means of a relevant system
of holding and transferring shares (or interests in shares) in
uncertificated form.
No transfer of shares will be registered if, in the reasonable
determination of the Directors, the transferee is or may be a
Prohibited Person (as defined in the Articles), or is or may be
holding such shares on behalf of a beneficial owner who is or may
be a Prohibited Person. The Directors shall have power to implement
and/or approve any arrangements they may, in their absolute
discretion, think fit in relation to the evidencing of title to and
transfer of interests in shares in the Company in uncertificated
form (including in the form of depositary interests or similar
interests, instruments or securities).
Rights to appoint and remove Directors
Subject to the BVI Companies Act and the Articles, the Directors
shall have power at any time, and from time to time, without
sanction of the members, to appoint any person to be a Director,
either to fill a casual vacancy or as an additional Director.
Subject to the BVI Companies Act and the Articles, the members may
by a Resolution of Members appoint any person as a Director and
remove any person from office as a Director.
For so long as an initial holder of Founder Preferred Shares
(being a Founding Entity together with its affiliates) holds 20% or
more of the Founder Preferred Shares in issue, such holder shall be
entitled to nominate a person as a Director of the Company and the
Directors shall appoint such persons. In the event such holder
notifies the Company to remove any Director nominated by him the
other Directors shall remove such Director, and in the event of
such a removal the relevant holder shall have the right to nominate
a Director to fill such vacancy.
No Director has a service contract with the Company, nor are any
such contracts proposed. There are no pension, retirement or other
similar arrangements in place with the Directors nor are any such
arrangements proposed.
Powers of the Directors
Subject to the provisions of the BVI Companies Act and the
Articles, the business and affairs of the Company shall be managed
by, or under the direction or supervision of, the Directors. The
Directors have all the powers necessary for managing, and for
directing and supervising, the business and affairs of the Company.
The Directors may exercise all the powers of the Company to borrow
or raise money (including the power to borrow for the purpose of
redeeming shares) and secure any debt or obligation of or binding
on the Company in any manner including by the issue of debentures
(perpetual or otherwise) and to secure the repayment of any money
borrowed, raised, or owing by mortgage, charge, pledge, or lien
upon the whole or any part of the Company's undertaking property or
assets (whether present or future) and also by a similar mortgage,
charge, pledge, or lien to secure and guarantee the performance of
any obligation or liability undertaken by the Company or any third
party.
Directors and their interests
The Directors of the Company who served during the year and
subsequent to the date of this Report are:
Name Position Date of appointment
Noam Gottesman Founder and Non-Executive 3 November 2017
Director
-------------------------- --------------------
Michael Fascitelli Founder and Non-Executive 3 November 2017
Director
-------------------------- --------------------
Lord Myners of Truro Chairman 3 November 2017
CBE
-------------------------- --------------------
Jeremy Isaacs CBE Independent Non-Executive 3 November 2017
Director
-------------------------- --------------------
Guy Yamen Independent Non-Executive 3 November 2017
Director
-------------------------- --------------------
In addition IAG Limited served from incorporation on 1 November
2017 to 3 November 2017.
During the year the Company issued the following shares and
options to Directors of the Company:
Founder
Ordinary Percentage Preferred
Shares of Ordinary Shares Warrants Options
Shares in
issue
2018 2018 2018 2018 2018
Number % Number Number Number
Noam Gottesman(1) 1,200,000 2.48 800,000 2,000,000 -
Michael Fascitelli(2) 1,200,000 2.48 800,000 2,000,000 -
Lord Myners of Truro
CBE 10,000 0.02 - 10,000 50,000
Jeremy Isaacs CBE 7,500 0.02 - 7,500 37,500
Guy Yamen 7,500 0.02 - 7,500 37,500
(1) Represents an interest held by TOMS Acquisition II LLC. Mr
Gottesman is the managing member and majority owner of TOMS
Acquisition II LLC and may be considered to have beneficial
ownership of TOMS Acquisition II LLC's interests in the
Company.
(2) Represents an interest held by Imperial Landscape Sponsor
LLC. Mr. Fascitelli is the manager and majority owner of Imperial
Landscape Sponsor LLC and may be considered to have beneficial
ownership of Imperial Landscape Sponsor LLC's interests in the
Company.
Directors' remuneration
The fees to directors during the year to 31 October 2018 were as
follows:
2018
US$
Lord Myners of Truro CBE 100,000
Jeremy Isaacs CBE 75,000
Guy Yamen 75,000
The Non-Founder Directors opted to have their first year's
annual remuneration settled by the issue of Ordinary Shares at
US$10 per Ordinary Share. Lord Myners received 10,000 Ordinary
Shares and Jeremy Isaacs and Guy Yamen received 7,500 Ordinary
Shares each.
Substantial shareholdings
As at 7 February 2019 (the latest practicable date prior to the
publication of this Report), the following had disclosed an
interest in the issued Ordinary Share capital of the Company (being
5% or more of the voting rights in the Company) in accordance with
the requirements of the Disclosure and Transparency Rules (the
"DTRs"):
Number Date of disclosure Notified
of Ordinary to Company percentage
Shareholder Shares (1) of voting
(1) rights (1)
Suvretta Captial Management,
LLC 2,500,000 21.11.2017 5.16%
------------- ------------------- ------------
Jana Partners LLC 2,500,000 22.11.2017 5.16%
------------- ------------------- ------------
V3 Capital Management L.P. 2,800,000 22.11.2017 5.78%
------------- ------------------- ------------
Long Pond Capital, LP 2,450,000 23.11.2017 5.06%
------------- ------------------- ------------
Alyeska Investment Group,
L.P. 2,500,000 23.11.2017 5.16%
------------- ------------------- ------------
Third Point LLC 4,500,000 27.11.2017 9.29%
------------- ------------------- ------------
(1) Since the date of disclosures to the Company, the interest
of any person listed above in Ordinary Shares may have increased or
decreased without any obligation on the relevant person to make
further notification to the Company pursuant to the DTRs.
Change of control
The Company is not party to any significant contracts that are
subject to change of control provisions in the event of a takeover
bid. There are no agreements between the Company and its Directors
or employees providing compensation for loss of office or
employment that occurs because of a takeover bid.
The Directors have reason to believe that PricewaterhouseCoopers
LLP conducted an effective audit. The Directors have provided the
auditors with full access to all of the books and records of the
Company.
Corporate Governance Statement
The Company is a BVI registered company with a standard listing
on the London Stock Exchange. For as long as the Company has a
standard listing it is not required to comply or explain
non-compliance with the UK Corporate Governance Code (the "Code")
issued by the Financial Reporting Council ("FRC") in April 2016.
However, the Company is firmly committed to high standards of
corporate governance and maintaining a sound framework through
which the strategy and objectives of the Company are set and the
means of attaining these objectives and monitoring performance are
determined. At Admission, the Company therefore stated its
intention to voluntarily comply with the Code. The Code is
available on the FRC's website, www.frc.co.uk. The Company also
complies with the corporate governance regime applicable to the
Company pursuant to the laws of the British Virgin Islands.
As at the date of this Report, the Company is in compliance with
the Code with the exception of the following:
-- Given the wholly non-executive composition of the Board,
certain provisions of the Code (in particular the provisions
relating to the division of responsibilities between the Chairman
and chief executive and executive compensation) are considered by
the Board to be inapplicable to the Company. In addition, the
Company does not comply with the requirements of the Code in
relation to the requirement to have a senior independent
director.
-- The Code also recommends the submission of all directors for
re-election at annual intervals. No Director will be required to
submit for re-election until the first annual general meeting of
the Company following the Company's first acquisition.
-- Until completion of the Company's first acquisition, the
Company will not have nomination, remuneration, audit or risk
committees. The Board as a whole instead reviews its size,
structure and composition, the scale and structure of the
Directors' fees (taking into account the interests of Shareholders
and the performance of the Company), takes responsibility for the
appointment of independent auditors and payment of their audit fee,
monitors and reviews the integrity of the Company's financial
statements, including the Company's internal control and risk
management arrangements in relation to its financial reporting
process, and takes responsibility for any formal announcements on
the Company's financial performance. Following the Company's first
acquisition, the Board intends to put in place nomination,
remuneration, audit and risk committees.
Share dealing
As at the date of this Report, the Board has voluntarily adopted
a share dealing code which is consistent with the rules of the
Market Abuse Regulation 596/2014 (the "Market Abuse Regulation").
The Board is responsible for taking all proper and reasonable steps
to ensure compliance with the Market Abuse Regulation by the
Directors.
Relations with Shareholders
The Directors are available for communication with shareholders
and all shareholders will have the opportunity, and are encouraged,
to attend and vote at any future Annual General Meeting of the
Company, the first of which will take place within 18 months
following completion of the Acquisition, during which the Board
will be available to discuss issues affecting the Company.
Statement of going concern
The Directors have considered the financial position of the
Company and have concluded that it is appropriate to prepare the
financial statements on a going concern basis.
Internal control
The Board is responsible for determining the nature and extent
of the significant risks it is willing to take in achieving its
strategic objectives. The Board maintains sound risk management and
internal control systems. The Board has reviewed the Company's risk
management and control systems and believes that the controls are
satisfactory given the nature and size of the Company. Controls
will be reviewed following completion of its first acquisition.
Financial Risk Profile
The Company's financial instruments comprise mainly of cash and
cash equivalents, and various items such as payables and
receivables that arise directly from the Company's operations.
Details of the risks relevant to the Company are included in the
notes to the financial statements and in this report.
Branches
At the date of this Report, the Company does not have any
branches.
Management Report
For the purposes of compliance with DTR 4.1.5R(2), DTR 4.1.8R
and DTR4.1.11R, the required content of the "Management Report" can
be found in this Report of Directors and the Principal Risks and
Uncertainties section of this report.
Directors' Responsibilities
The Directors are responsible for preparing the Report and the
financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the company financial statements in accordance with
International Financial Reporting Standards (IFRSs) and its
interpretations as issued by the International Accounting Standards
Board ("IASB"). Under company law the Directors must not approve
the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the company and of
the profit or loss of the company for that year. In preparing these
financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRSs and its interpretations as
issued by the IASB have been followed, subject to any material
departures disclosed and explained in the financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company's
transactions and disclose with reasonable accuracy at any time the
financial position of the company and enable them to prepare the
financial statements. They are also responsible for safeguarding
the assets of the Company and hence taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the company's website. A copy of the financial statements is
placed on our website www.landscapeacquisitionholdingslimited.com.
The Directors consider that the annual report and accounts, taken
as a whole, are fair, balanced and understandable and provide the
information necessary for shareholders to assess a company's
performance, business model and strategy.
Each of the Directors, who are in office and whose names and
functions are listed in Corporate information, confirms that, to
the best of his knowledge:
-- the Company financial statements, which have been prepared in accordance with IFRSs and its interpretations as issued by the IASB, give a true and fair view of the assets, liabilities, financial position and loss of the Company; and
-- the management report includes a fair review of the
development and performance of the business and the position of the
Company, together with a description of the principal risks and
uncertainties that it faces.
Disclosure of information to Auditors
Each of the persons who is a Director at the date of approval of
this Report confirms that:
-- so far as the director is aware, there is no relevant audit
information of which the Company's auditors are unaware; and
-- each director has taken all the steps that he/she ought to
have taken as a director in order to make himself/herself aware of
any relevant audit information and to establish that the Company's
auditors are aware of that information.
Directors' indemnities
As at the date of this Report, indemnities granted by the
Company to the Directors are in force to the extent permitted under
BVI law. The Company also maintains Directors' and Officers'
liability insurance, the level of which is reviewed annually.
By order of the Board:
Noam Gottesman
Director
13 February 2019
Principal Risks and Uncertainties
The Board has identified the following principal risks and
uncertainties facing the Company which remain unchanged from the
principal risks and uncertainties set out in the Company's
prospectus dated 15 November 2017. The risks referred to below do
not purport to be exhaustive and are not set out in any particular
order of priority. Additional risks and uncertainties not currently
known to the Board or which the Board currently deems immaterial
may also have an adverse effect on the Company's business. In
particular, the Company's performance may be affected by changes in
the market and/or economic conditions and in legal, regulatory and
tax requirements.
Key information on the key risks that are specific to the issuer
or its industry
Business Strategy
-- The Company is a newly formed entity with no operating
history and has not yet identified any potential target company or
business for the Acquisition.
-- The Company may acquire either less than whole voting control
of, or less than a controlling equity interest in, a target, which
may limit its operational strategies.
-- The Company may be unable to complete the Acquisition in a
timely manner or at all or to fund the operations of the target
business if it does not obtain additional funding.
The Company's relationship with the Directors, the Founders and
the Founder Entity and conflicts of interest
-- The Company is dependent on Mr Gottesman and Mr Fascitelli,
(collectively, the "Founders") to identify potential acquisition
opportunities and to execute the Acquisition. The loss of the
services of any of them could materially adversely affect it.
-- The Founders and Directors are currently affiliated and may
in the future become affiliated with entities engaged in business
activities similar to those intended to be conducted by the Company
and may have conflicts of interest in allocating their time and
business opportunities.
-- The Directors will allocate a portion of their time to other
businesses leading to the potential for conflicts of interest in
their determination as to how much time to devote to the Company's
affairs.
-- The Company may be required to issue additional Ordinary
Shares pursuant to the terms of the Founder Preferred Shares, which
would dilute existing Ordinary Shareholders.
Taxation
-- The Company may be a "passive foreign investment company" for
US federal income tax purposes and adverse tax consequences could
apply to US investors.
Key information on the key risks that are specific to the
securities
The Ordinary Shares and Warrants
-- The Standard Listing of the Ordinary Shares and Warrants will
not afford Shareholders the opportunity to vote to approve the
Acquisition.
-- The Warrants can only be exercised during the Subscription
Period and to the extent a Warrantholder has not exercised its
Warrants before the end of the Subscription Period, those Warrants
will lapse, resulting in the loss of a holder's entire investment
in those Warrants.
-- The Warrants are subject to mandatory redemption and
therefore the Company may redeem a Warrantholder's unexpired
Warrants prior to their exercise at a time that is disadvantageous
to a Warrantholder, thereby making those Warrants worthless.
-- The issuance of Ordinary Shares pursuant to the exercise of
the Warrants will dilute the value of a Shareholder's Ordinary
Shares.
Independent auditors' report to the directors of Landscape
Acquisition Holdings Company
Report on the audit of the financial statements
Opinion
In our opinion, Landscape Acquisition Holdings Company's
financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 31 October 2018 and of its loss and cash flows for
the year then ended; and
-- have been properly prepared in accordance with International
Financial Reporting Standards (IFRSs) as issued by the
International Accounting Standards Board (IASB).
We have audited the financial statements, included within the
Report and Financial Statements (the "Annual Report"), which
comprise: the statement of financial position as at 31 October
2018; the statement of comprehensive income, the statement of cash
flows and the statement of changes in equity for the year then
ended; and the notes to the financial statements, which include a
description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities under ISAs (UK) are further described in the
Auditors' responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We remained independent of the Company in accordance with the
ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC's Ethical
Standard, as applicable to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements.
Our audit approach
Overview
Overall materiality: $4.9 million, based on 1% of net assets
Audit scope: Single audit location to cover the Company's
operations, transactions and balances
Key audit matters: Fair value measurement of Founder Preferred
Shares and associated share-based payment charge
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain.
We did not identify any key audit matters relating to any
irregularities, including fraud. As in all of our audits we also
addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the
directors that represented a risk of material misstatement due to
fraud.
Key audit matters
Key audit matters are those matters that, in the auditors'
professional judgement, were of most significance in the audit of
the financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not
due to fraud) identified by the auditors, including those which had
the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters, and any comments we make on the
results of our procedures thereon, were addressed in the context of
our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on
these matters. This is not a complete list of all risks identified
by our audit.
Key audit matter How our audit addressed the key audit matter
=========================================================== =========================================================
Fair value measurement of Founder Preferred Shares and We assessed compliance of the accounting policy adopted
associated share-based payment charge with IFRS 2 'Share-based payment'.
Refer to Note 2.9 (accounting policies), Note 6 and Note 11 In order to test management's valuation model, we
to the financial statements. deployed a valuations expert to assess the
The Company has issued 1,600,000 Founder Preferred Shares bespoke valuation methodology applied and the related
in connection with its IPO to its assumptions.
Founder Entities as set out in Note 11 to the financial We performed an assessment of the valuation using a Monte
statements. Carlo valuation method to independently
The Founder Preferred Shares provide a right to receive an test the valuation model and its outcome as determined by
Annual Dividend Amount which is management's expert.
payable based on the future growth in share price and in Our work has consisted of considering the reasonableness
line with a calculation specified of the following assumptions made
by the terms of the Founder Preferred Shares set forth in by the independent expert on behalf of management:
the Company's Articles of Association. o Volatility post-acquisition;
Management appointed a third party expert to perform the o Probability of IPO;
valuation of the share-based payments o Probability of acquisition; and
award at the date of each issue of Founder Preferred o Risk free interest rate.
Shares. In each of the above areas, we have considered the impact
We focused on the fair value of the Founder Preferred of management's assumption, in the
Shares IFRS 2 share-based payment charge form of a sensitivity. We have also considered the
component due to the following reasons: reasonableness of the above assumptions
* The Founder Preferred Share equity charge for the against publicly available market data and the IFRS 2
period ended 31 October 2018 of $55.9 million is requirements for fair market value.
material to the financial statements; Based on our testing, we found that the Founder Preferred
Share equity charge of $55.9 million
was determined using an acceptable valuation methodology.
* A number of key assumptions as set out in Note 6 to
the financial statements used in the valuation are
judgemental and not solely based on market observable
data; and
* The fair valuation model is bespoke and complex.
=========================================================== =========================================================
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
Company, the accounting processes and controls, and the industry in
which it operates.
The audit was an initial audit and required obtaining an
understanding of the entity, its environment and life-cycle stage
of the business including the progression to initial public
offering.
The Company operates as a single business and within one
geography, and we therefore performed an audit of the complete
financial information of the single business. In establishing our
overall approach we assessed the risks of material misstatement,
taking into account the nature, likelihood and potential magnitude
of any misstatement. Following this assessment, we applied
professional judgement to determine the extent of testing required
over each balance in the financial statements.
The risk of material misstatement that had the greatest effect
on our audit, including the allocation of our resources and effort,
relate to the fair value measurement of Founder Preferred Shares
and associated share-based payment charge. This has been identified
as a "key audit matter" in the table above.
Materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate on
the financial statements as a whole.
Based on our professional judgement, we determined materiality
for the financial statements as a whole as follows:
Overall materiality $4.9 million.
=============================== =====================================================================================
How we determined it 1% of net assets.
=============================== =====================================================================================
Rationale for benchmark applied We applied this benchmark given the stage of development of the Company activities
since incorporation
and funds raised as a special purpose acquisition Company which meant that an asset
benchmark
was more appropriate than an income statement benchmark such as profit before tax or
revenue.
=============================== =====================================================================================
We agreed with the Board of Directors that we would report to
them misstatements identified during our audit above $0.24 million
as well as misstatements below that amount that, in our view,
warranted reporting for qualitative reasons.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which ISAs (UK) require us to report to you when:
-- the directors' use of the going concern basis of accounting
in the preparation of the financial statements is not appropriate;
or
-- the directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the Company's ability to continue to adopt the going
concern basis of accounting for a period of at least twelve months
from the date when the financial statements are authorised for
issue.
However, because not all future events or conditions can be
predicted, this statement is not a guarantee as to the Company's
ability to continue as a going concern.
Reporting on other information
The other information comprises all of the information in the
Annual Report other than the financial statements and our auditors'
report thereon. The directors are responsible for the other
information. Our opinion on the financial statements does not cover
the other information and, accordingly, we do not express an audit
opinion or any form of assurance thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If we
identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude
whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to
report that fact. We have nothing to report based on these
responsibilities.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial
statements
As explained more fully in the Report of the Directors, the
directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for
being satisfied that they give a true and fair view. The directors
are also responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the directors are
responsible for assessing the Company's ability to continue as a
going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditors' report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditors' report.
Use of this report
This report, including the opinion, has been prepared for and
only for the Company's directors as a body for fulfilling their
obligation under the Listing Rules 14.3.23R and 4.1.7R of the FCA's
Disclosure Guidance and Transparency Rules sourcebook ("DTR") in
accordance with our engagement letter dated 7 March 2018 and for no
other purpose. We do not, in giving this opinion, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come, including
without limitation under any contractual obligations of the
Company, save where expressly agreed by our prior consent in
writing.
Partner responsible for the audit
The engagement partner on the audit resulting in this
independent auditors' report is Philip Stokes.
PricewaterhouseCoopers LLP
Chartered Accountants
London
13 February 2019
Statement of Comprehensive Income for the year ended 31 October
2018
For the year
ended 31
October 2018
Note US$
Investment income 7 7,263,502
Other income 253,532
Expenses 3 (7,774,945)
Non-cash charge related to Founder
Preferred Shares and associated
warrants 6 (55,889,180)
Non-cash charge related to warrant
redemption liability 13 (484,250)
________
Operating loss (56,631,341)
________
Loss and total comprehensive loss
for the year (56,631,341)
Basic and diluted loss per Ordinary
and Founder Preferred share 8 (1.19)
The notes form an integral part of these financial
statements.
Statement of Financial Position as at 31 October 2018
31 October
2018
Note US$
Assets
Current assets
Cash and cash equivalents 3,433,662
Short-term investments 7 490,127,009
Prepayments and other assets 9 28,227
___________
Total assets 493,588,898
___________
Liabilities
Current liabilities
Payables 10 (3,202,087)
___________
Total current liabilities (3,202,087)
Non-current liabilities
Warrant redemption liability 13 (484,250)
___________
Total non-current liabilities (484,250)
___________
Total liabilities (3,686,337)
___________
Net assets 489,902,561
Equity
Founder Preferred Share Capital 11 16,000,000
Ordinary Share Capital - nominal -
value
Ordinary Share Capital - share
premium 11 474,533,991
Accumulated losses (631,430)
___________
Total equity 489,902,561
Net asset value per share 8 US$9.79
The notes form an integral part of these financial
statements.
The financial statements were approved and authorised for issue
by the board of directors on 13 February 2019 and signed on its
behalf by:
Noam Gottesman
Director
Statement of Changes in Equity for the year ended 31 October
2018
Note Founder Ordinary Ordinary (Accumulated
Preferred Share Capital Share Capital losses)
Share - nominal - share Total
Capital value premium
US$ US$ US$ US$ US$
At inception, 1 November - - - - -
2017
Issue of shares 11 16,000,000 - 484,250,000 55,889,180 556,139,180
Issue costs 11 - - (9,716,009) - (9,716,009)
Loss and total comprehensive
loss for year - - - (56,631,341) (56,631,341)
Share based compensation
-
Directors' options 12 - - - 110,731 110,731
________ ________ _________ _________ _________
Balance as at 31 October
2018 16,000,000 - 474,533,991 (631,430) 489,902,561
________ ________ _________ _________ _________
The notes form an integral part of these financial
statements.
Statement of Cash Flows for the year ended 31 October 2018
For the year
ended 31
October 2018
Note US$
Cash flows from operating activities
Loss and total comprehensive loss
for the year (56,631,341)
Adjustments for:
Gains on short-term investments 7 (7,263,502)
Charge related to Founder Preferred
Shares 6 55,889,180
Charge related to warrant redemption
liability 13 484,250
Charge related to director options 12 110,731
Charge related to directors' remuneration
settled in shares 250,000
Movements in working capital:
Increase in debtors and prepayments (28,227)
Increase in payables 3,202,087
___________
Net cash used in operating activities (3,986,822)
___________
Investing activities
Purchase of short-term investments (1,750,071,807)
Disposal of short-term investments 1,267,208,300
___________
Net cash used in investing activities (482,863,507)
___________
Financing activities
Issue of Founder Preferred Shares
and warrants 11 16,000,000
Issue of Ordinary Shares and warrants 11 484,000,000
Share issue expenses 11 (9,716,009)
___________
Net cash provided by financing
activities 490,283,991
___________
Increase in cash and cash equivalents 3,433,662
Cash and cash equivalents at start -
of year
___________
Cash and cash equivalents at end
of year 3,433,662
Non-cash financing activity
Issuance of Ordinary Shares for
directors' remuneration 250,000
The notes form an integral part of these financial
statements.
Notes to the financial statements for the year ended 31 October
2018
1. General information
The Company was incorporated with limited liability under the
laws of the British Virgin Islands under the BVI Companies Act on 1
November 2017. The address of the Company's registered office is
Ritter House, Wickhams Cay II, Road Town, Tortola, VG1110, British
Virgin Islands. The Company's Ordinary Shares and Warrants were
admitted for trading on the Main Market of the London Stock
Exchange on 20 November 2017, after raising gross proceeds of
US$500,000,000 for a potential acquisition (an "Acquisition") from
the placing of Ordinary Shares (with matching Warrants) at a
placing price of US$10 per Ordinary Share and the subscription of
Founder Preferred Shares (with warrants) being issued to
subscribers of Founder Preferred Shares on the basis of one Warrant
per Founder Preferred Share).
These financial statements were approved and authorised for
issue in accordance with a resolution of the Directors on 13
February 2019.
2. Summary of significant accounting policies
The principal accounting policies applied in these financial
statements and are set out below.
2.1 Basis of preparation
These financial statements have been prepared under the
historical cost convention, as modified by the revaluation of
financial assets at fair value through profit or loss and are in
accordance with International Financial Reporting Standards and its
interpretations as issued by the International Accounting Standards
Board ("IASB") and those parts of the BVI Business Companies Act
applicable under IFRS. As the Company was incorporated on 1
November 2017, there is no comparative information.
The financial statements and notes thereto are presented in U.S.
dollars, which is the Company's presentational and functional
currency and are rounded to the nearest dollar, except when
otherwise indicated.
Accounting policies have been consistently applied.
There are no new accounting standards adopted which have a
material impact on these financial statements.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires the Directors to exercise judgement in the process of
applying the Company's accounting policies. Changes in assumptions
may have a significant impact on the financial statements in the
period the assumptions changed. The Directors believe that the
underlying assumptions are appropriate and that the Company's
financial statements therefore present the financial position and
results fairly. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are
significant to the financial statements, are disclosed in note
2.14.
2.2 Going concern
The Directors have a reasonable expectation and belief that the
Company has adequate resources to continue in operational existence
for the foreseeable future given the available cash and forecast
cash outflows and expect to announce an acquisition before the
second anniversary of the Admission. Thus, the financial statements
are prepared on a going concern basis.
2.3 Foreign currency translation
Functional and presentation currency
The Company is listed on the Main Market of the London Stock
Exchange, the capital raised in the IPO and the subscription of
Founder Preferred Shares is denominated in US dollars and it is
intended that any dividends and distributions to be paid to
shareholders are to be denominated in US dollars. The performance
of the Company is measured and reported to the shareholders in US
dollars, which is the Company's functional currency. The Directors
consider the US dollar as the currency of the primary economic
environment in which the Company operates and the one that most
faithfully represents the economic effects of the underlying
transactions, events and conditions.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign currency assets and liabilities are
translated into the functional currency using the exchange rate
prevailing at the balance sheet date.
Foreign exchange gains and losses arising from translation are
included in the statement of comprehensive income.
2.4 Financial assets at fair value through profit or loss
Classification
The Company classifies its investment in US Treasury Bills as a
financial asset at fair value through profit or loss.
Financial assets classified at fair value through profit or loss
are financial instruments that are managed, and their performance
is evaluated on a fair value basis in accordance with the Company's
documented investment strategy.
The Company's policy requires the Directors to evaluate the
information about these financial assets on a fair value basis
together with other related financial information. Assets in this
category are classified as current assets if they are expected to
be realised within 12 months of the balance sheet date. Those not
expected to be realised within 12 months of the balance sheet date
will be classified as non-current.
Recognition, derecognition and measurement
Regular purchases and sales of investments are recognised on the
trade date - the date on which the Company commits to purchase or
sell the investment. Financial assets at fair value through profit
or loss are initially recognised at fair value. Transaction costs
are expensed as incurred in the statement of comprehensive income.
Financial assets are derecognised when the rights to receive cash
flows from the investments have expired or the Company has
transferred substantially all risks and rewards of ownership.
Subsequent to initial recognition, all financial assets at fair
value through profit or loss are measured at fair value. Gains and
losses arising from changes in the fair value of the 'financial
assets at fair value through profit or loss' category are presented
in the statement of comprehensive loss within net changes in fair
value of financial assets at fair value through profit or loss in
the period in which they arise.
Dividend income or distributions of a revenue nature from
financial assets at fair value through profit or loss are
recognised in the statement of comprehensive loss within dividend
income when the Company's right to receive payments is
established.
2.5 Offsetting financial instruments
Financial instruments are offset and the net amount reported in
the balance sheet only when there is legally enforceable right to
offset the recognised amounts and there is an intention to settle
on a net basis, or realise the asset and settle the liability
simultaneously.
2.6 Cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposits,
other short-term highly liquid investments with original maturities
of three months or less, and bank overdrafts.
2.7 Payables and accrued expenses
Payables and accrued expenses are recognised initially at fair
value and subsequently measured at amortised cost using the
effective interest method.
2.8 Share-based payments
The Founder Preferred Shares represent equity-settled share
based arrangements under which the Company receives services as a
consideration for the additional rights attached to these equity
shares, over and above their nominal price. The fair value of the
grant of Founder Preferred Shares in excess of any purchase price
received is recognised as an expense. In addition, the Company has
granted options to the Non-Founder Directors. The fair value of the
Founder Preferred Shares and the options is determined using a
valuation model.
The total amount to be expensed as a respective share-based
payment charge is determined by reference to the fair value of the
awards granted:
-- including any market performance condition;
-- excluding the impact of any service and non-market performance vesting conditions; and
-- including the impact of any non-vesting conditions.
Non-market performance and service conditions are included in
assumptions about the number of awards that are expected to
vest.
2.9 Fair Value of Warrants
Warrants not subject to IFRS 2 are valued at redemption value of
$0.01 as financial instruments. The Warrants are compound financial
instruments with a liability recognised and the remainder in
equity.
2.10 New accounting standards
This is the first full year set of financial statements prepared
by the Company. The Company applied all applicable standards and
applicable interpretations published by the IASB for the year ended
31 October 2018. The Company did not adopt any standard or
interpretation published by the IASB for which the mandatory
application date is on or after 1 January 2018 with the exception
of IFRS 9 Financial Instruments which is effective 1 January 2018
and has been early adopted.
Based on the Company's existing activity, there are no new
interpretations, amendments or full standards that have been issued
but not effective or adopted for the year ended 31 October 2018
that will have a material impact on the Company.
2.11 Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors as it is
the body that makes strategic decisions. The Directors are of the
opinion that there is only a single operational segment being the
investment in US Treasury Bills as disclosed in note 7. As a result
no segment information has been provided as the Company only
accumulates its funds raised for investment in US Treasury
Bills.
2.12 Share capital
Founder Preferred Shares, Ordinary Shares, and Warrants are
classified as equity. Incremental costs directly attributable to
the issue of new ordinary shares are shown in equity as a
deduction, net of tax, from the proceeds.
2.13 Auditor remuneration
During the year ended 31 October 2018, the Company obtained the
following services from the independent auditors:
Fees payable to the Company's auditor for the audit of the
Company's financial statements for the year ended 31 October 2018 -
$38,337
Fees payable to the Company's auditor for capital market
services in relations to the Company's IPO - $107,000
Fees payable to the Company's auditor for work performed in
connection with a potential acquisition for the year ended 31
October 2018 - $3,045,205
2.14 Critical accounting judgements and key sources of estimation uncertainty
There were no critical estimates or judgments in the year.
3. Expenses
2018
US$
Listing expenses 958,205
Legal and professional fees 6,291,222
Directors' remuneration (including
share-based compensation charge) 360,731
Administration fees 98,419
General expenses 66,368
________
7,774,945
4. Taxation
The Company is not subject to income tax or corporation tax in
the British Virgin Islands.
5. Fair value
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. In determining fair
value, the Company may use various methods including market, income
and cost approaches.
Based on these approaches, the Company often utilises certain
assumptions that market participants would use in pricing the asset
or liability, including assumptions about risk and the risks
inherent in the inputs to the valuation technique. These inputs can
be readily observable, market corroborated, or generally
unobservable inputs. The Company utilises valuation techniques that
maximise the use of observable inputs and minimise the use of
unobservable inputs. Based on the observability of the inputs used
in the valuation techniques the Company is required to provide the
following information according to the fair value hierarchy. The
fair value hierarchy ranks the quality and reliability of the
information used to determine fair values.
Financial assets and liabilities carried at fair value will be
classified and disclosed in one of the following three
categories:
Level 1 - Quoted prices for identical assets and liabilities
traded in active exchange markets, such as the New York Stock
Exchange.
Level 2 - Observable inputs other than Level 1 including quoted
prices for similar assets or liabilities, quoted prices in less
active markets, or other observable inputs that can be corroborated
by observable market data. Level 2 also includes derivative
contracts whose value is determined using a pricing model with
observable market inputs or can be derived principally from or
corroborated by observable market data.
Level 3 - Unobservable inputs supported by little or no market
activity for financial instruments whose value is determined using
pricing models, discounted cash flow methodologies, or similar
techniques, as well as instruments for which the determination of
fair value requires significant management judgment or estimation;
also includes observable inputs for nonbinding single dealer quotes
not corroborated by observable market data. The Company has various
processes and controls in place to ensure that fair value is
reasonably estimated. A model validation policy governs the use and
control of valuation models used to estimate fair value. The
Company performs due diligence procedures over third-party pricing
service providers in order to support their use in the valuation
process. Where market information is not available to support
internal valuations, independent reviews of the valuations are
performed and any material exposures are escalated through a
management review process.
While the Company believes its valuation methods are appropriate
and consistent with other market participants, the use of different
methodologies or assumptions to determine the fair value of certain
financial instruments could result in a different estimate of fair
value at the reporting date.
As of 31 October 2018, financial assets at fair value through
profit or loss of US$490,127,009 were categorized as Level 2
securities. There were no transfers between Levels during the
year.
6. Charge Related to Founder Preferred Shares
The total charge related to Founder Preferred Shares and
warrants for the year ended 31 October 2018 was US$55,889,180.
Founder Preferred Shares
The Company has outstanding Founder Preferred Shares issued to
entities connected to its Founders, which have been accounted for
in accordance with IFRS 2 "Share-based payment" as equity-settled
share-based payment awards. The fair value of the Founder Preferred
Shares over and above their purchase price was determined as
US$55,402,429 at the grant date. The preferred share awards do not
have any vesting or service conditions and vested immediately on
the dates of the grant. Accordingly, the aggregate non-cash charge
relating to the Founder Preferred Shares for the year ended 31
October 2018 was US$55,402,429. The fair value of the awards were
determined using a Monte Carlo valuation model and was based on the
following assumptions:
15-Nov-2017
Number of securities issued 1,600,000
Vesting period Immediate
Ordinary share price upon initial public offering ("IPO") US$10.00
Founder Preferred Share price US$10.00
Probability of Acquisition 65.5%
Time to Acquisition 1.5 years
Volatility (post-Acquisition) 38.68%
Risk free interest rate 2.26%
Expected volatility was estimated with reference to a
representative set of listed companies taking into account the
circumstances of the Company.
The probability and timing of an Acquisition has been estimated
only for the purposes of valuing the Founder Preferred Shares as at
15 November 2017 and no assurance can be given that the Acquisition
will occur at all or in any particular timeframe.
Warrants
The Company has outstanding warrants issued to entities
connected to its Founders. The warrants do not have any vesting or
service conditions and vested immediately on the date of the grant.
Accordingly, the aggregate non-cash charge relating to the warrants
for the year ended 31 October 2018 was US$486,751. The fair value
of the awards was determined using a Monte Carlo valuation model
and was based on the following assumptions:
Share price US$10.00
Exercise price US$11.50
Redemption price US$18.00
Risk free rate 2.26%
Probability of Acquisition 65.5%
Volatility (post-Acquisition) 38.68%
Expected volatility was estimated with reference to a
representative set of listed companies taking into account the
circumstances of the Company.
The probability and timing of an Acquisition has been estimated
only for the purposes of valuing the Warrants as at 15 November
2017 and no assurance can be given that the Acquisition will occur
at all or in any particular timeframe.
7. Financial assets at fair value through profit or loss
The Company holds zero coupon US Treasury Bills which at 31
October 2018 had a cost of US$489,147,222 a market value of
US$490,127,009 and a maturity value of US$495,711,000. The increase
in value of US$979,787 was recorded as investment income during the
year. The Company also realised US$6,283,715 during the year ended
31 October 2018. All mature within nine months of the year end.
8. Loss per share and net asset value per share
The loss per share calculation for the year ended 31 October
2018 is based on loss for the year of US$(56,631,341) and the
weighted average number of Ordinary Shares and Founder Preferred
Shares of 47,675,760.
Net asset value per share is based on net assets of
US$489,902,561 divided by the 48,425,000 Ordinary Shares and
1,600,000 Founder Preferred Shares in issue at 31 October 2018.
The Warrants and Options are considered non-dilutive at 31
October 2018.
9. Prepayments and other assets
2018
US$
Other prepayments 27,177
Accrued interest receivable 1,050
_________
28,227
10. Payables
2018
US$
Accruals* 3,163,750
Other payables 38,337
_________
3,202,087
*Professional fees in connection with aborted investment
11. Share capital
The authorised shares of the Company are as follows:
The authorised shares of the Company are as follows:
2018
US$
Authorised
Unlimited number of Ordinary Shares of -
no par value
Founder Preferred Shares Number
Balance at beginning of year -
Issued during the year 1,600,000
_________
Balance at end of year 1,600,000
Founder Preferred Share Capital US$
Balance at beginning of year -
On shares issued during the year 16,000,000
_________
Balance at end of year 16,000,000
Ordinary Shares Number
Balance at beginning of year -
Issued during the year 48,425,000
_________
Balance at end of year 48,425,000
Ordinary Share Capital US$
Balance at beginning of year -
On shares issued during the year 474,553,991
__________
Balance at end of year 474,533,991
2 Founder Preferred Shares were issued on 3 November 2017 at
US$10.00 per share and a further 1,599,998 issued on 14 November
2017, also at US$10.00 per share. There are no Founder Preferred
Shares held in Treasury. Each Founder Preferred Share was issued
with a Warrant as described below.
48,425,000 Ordinary Shares were issued on 20 November 2017
(48,400,000 were issued in the IPO at US$10.00 per share and 25,000
were issued to the Non-Founder Directors in conjunction with the
IPO). There are no Ordinary Shares held in Treasury. Each Ordinary
Share was issued with a Warrant as described below.
Issue costs of US$9,716,009 were deducted from the proceeds of
issue.
Ordinary Shares
Ordinary Shares confer upon the holders (in accordance with the
Articles):
(a) Subject to the BVI Companies Act, on a winding-up of the
Company the assets of the Company available for distribution shall
be distributed, provided there are sufficient assets available, to
the holders of Ordinary Shares and Founder Preferred Shares pro
rata to the number of such fully paid up shares held by each holder
relative to the total number of issued and fully paid up Ordinary
Shares as if such fully paid up Founder Preferred Shares had been
converted into Ordinary Shares immediately prior to the
winding-up;
(b) the right, together with any holder of the Founder Preferred
Shares, to receive all amounts available for distribution and from
time to time to be distributed by way of dividend or otherwise at
such time as the Directors shall determine (and in each case
distributed in respect of the fully paid up Founder Preferred
Shares pro rata to the number of fully paid up Ordinary Shares held
by any holder of Founder Preferred Shares, as if for such purpose
the Founder Preferred Shares had been converted into Ordinary
Shares immediately prior to such distribution plus, commencing from
consummation of the Acquisition, an amount equal to 20 per cent. of
the dividend which would be distributable on such number of
Ordinary Shares equal to the Preferred Share Dividend Equivalent
(as defined in the Prospectus)); and
(c) the right to receive notice of, attend and vote as a member
at any meeting of members except in relation to any Resolution of
Members that the Directors, in their absolute discretion (acting in
good faith) determine is: (i) necessary or desirable in connection
with a merger or consolidation in relation to, in connection with
or resulting from the Acquisition (including at any time after the
Acquisition has been made); or (ii) to approve matters in relation
to, in connection with or resulting from the Acquisition (whether
before or after the Acquisition has been made).
Founder Preferred Shares
The Founder Preferred Shares have US$nil par value.
Founder Preferred Shares confer upon the holder the
following:
-- the right to a share in the Annual Dividend Amount, to be
paid at the discretion of the Company (as defined in the
Prospectus);
-- the right to receive notice of, attend and vote as a Member
at any meeting of Members;
-- subject to the right of the holders of Founder Preferred
Shares to receive any Annual Dividend Amount from time to time, the
right, together with the holders of Ordinary Shares, to receive
such portion of all amounts available for distribution and from
time to time distributed by way of dividend or otherwise at such
time determined by the Directors;
-- in addition, commencing on and after an Acquisition, where
the Company pays a dividend on its Ordinary Shares, the holders of
the Founder Preferred Shares will receive an amount equal to 20 per
cent. of the dividend which would be distributable on such number
of Ordinary Shares equal to the Preferred Share Dividend
Equivalent. All such dividends on the Founder Preferred Shares will
be paid contemporaneously with the dividends on the Ordinary
Shares;
-- the right to an equal share (with the holders of Ordinary
Shares) in the distribution of the surplus assets of the Company on
its liquidation as are attributable to the Founder Preferred
Shares; and
-- the ability to convert into Ordinary Shares on a 1-for-1
basis subject to certain adjustments (mandatorily upon the last day
of the seventh full financial year after an Acquisition).
The Founder Preferred Shares are structured to provide a
dividend based on the future appreciation of the market value of
the Ordinary Shares thus aligning the interests of the Founders (as
defined in the Prospectus) with those of the investors on a long
term basis. Annual Dividend Amounts will be paid, at the discretion
of the Company, in either 1) Ordinary Shares and will be dilutive
to existing holders of Ordinary Shares, or 2) cash.
After an Acquisition, once the average price per Ordinary Share
is at least $11.50 for ten consecutive Trading Days, the holders of
Founder Preferred Shares will be entitled to receive "Annual
Dividend Amounts". In the first year in which such dividend becomes
payable, such dividend will be equal in value to 20 per cent. of
the increase in the market value of one Ordinary Share, being the
difference between US$10.00 and the Dividend Price (the average
closing price of the last ten trading days of the Company's
financial year), multiplied by such number of Ordinary Shares equal
to the Preferred Share Dividend Equivalent.
Thereafter, the Annual Dividend Amount will only become payable
if the Dividend Price during any subsequent year is greater than
the highest Dividend Price in any preceding year in which a
dividend was paid in respect of the Founder Preferred Shares. An
Annual Dividend Amount will be 20 per cent. of the increase in the
Dividend Price over the highest prior Dividend Price in any
preceding year multiplied by the Preferred Share Dividend
Equivalent.
The amounts used for the purposes of calculating an Annual
Dividend Amount and the relevant Preferred Share Dividend
Equivalent are subject to such adjustments as the Directors in
their absolute discretion determine to be fair and reasonable in
the event of a consolidation or sub-division of the Ordinary Shares
in issue after the date of admission to trading or otherwise as
determined in accordance with the Company's Memorandum and Articles
of Association.
Warrants
The Company has issued an aggregate of 50,025,000 Warrants to
the purchasers of both Ordinary Shares and Founder Preferred Shares
(including the 25,000 Warrants that were issued to Non-Founder
Directors in connection with their appointment). Each Warrant has a
term of 3 years following an Acquisition and entitles a Warrant
holder to subscribe for one-third of an Ordinary Share upon
exercise. Warrants will be exercisable in multiples of three for
one Ordinary Share at a price of US$11.50 per whole Ordinary
Share.
The Warrants are also subject to mandatory redemption at US$0.01
per Warrant if at any time the Average Price per Ordinary Share
equals or exceeds US$18.00 for a period of ten consecutive trading
days (subject to any prior adjustment in accordance with the terms
of the Warrant Instrument).
12. Share-based compensation
On 15 November 2017, the Company issued 125,000 options to
purchase its Ordinary Shares to its Non-Founder Directors that vest
upon an Acquisition; continued service until that time is required
for vesting. The options expire on the fifth anniversary following
an Acquisition and have an exercise price of US$11.50 per share
(subject to such adjustment as the Directors consider appropriate
in accordance with the terms of the Option Deeds).
The Company estimated the grant date fair value of each option
at US$1.61 using a Monte Carlo simulation model with the following
assumptions:
Share price US$10.00
Exercise price US$11.50
Risk free rate 2.26%
Probability of Acquisition 65.5%
Volatility (post-Acquisition) 38.68%
Share-based compensation expense of US$110,731 has been
recognised for these options in the accompanying financial
statements for the year ended 31 October 2018. Unamortized
share-based compensation expense of US$62,011 will be recognised
over the remaining estimated vesting period of approximately 6.5
months.
13. Warrant redemption liability
As a contingent obligation to redeem for cash, a separate
liability of US$484,250 was recognised.
14. Related party and material transactions
During the year the Company issued the following shares and
options to Directors of the Company:
Founder
Ordinary Preferred
Shares Shares Warrants Options
Number Number Number Number
Noam Gottesman(1) 1,200,000 800,000 2,000,000 -
Michael Fascitelli(2) 1,200,000 800,000 2,000,000 -
Lord Myners of Truro
CBE 10,000 - 10,000 50,000
Jeremy Isaacs CBE 7,500 - 7,500 37,500
Guy Yamen 7,500 - 7,500 37,500
(1) Represents an interest held by TOMS Acquisition II LLC. Mr
Gottesman is the managing member and majority owner of TOMS
Acquisition II LLC and may be considered to have beneficial
ownership of TOMS Acquisition II LLC's interests in the
Company.
(2) Represents an interest held by Imperial Landscape Sponsor
LLC. Mr. Fascitelli is the manager and majority owner of Imperial
Landscape Sponsor LLC and may be considered to have beneficial
ownership of Imperial Landscape Sponsor LLC's interests in the
Company.
The fees to directors during the year to 31 October 2018 were as
follows:
2018
US$
Lord Myners of Truro CBE 100,000
Jeremy Isaacs CBE 75,000
Guy Yamen 75,000
The Non-Founder Directors opted to have their first year's
annual remuneration settled by the issue of Ordinary Shares at
US$10 per Ordinary Share. Lord Myners received 10,000 Ordinary
Shares and Jeremy Isaacs and Guy Yamen received 7,500 Ordinary
Shares each.
The Founder Entities, Toms Acquisition II LLC and Imperial
Landscape Sponsor LLC or their affiliates, have received
reimbursements of expenses of US$124,589 of which US$35,000 is
outstanding at the year end. Noam Gottesman is the Founder and
Managing Partner of Toms Capital LLC and Michael Fascitelli is the
Founder and Managing General Partner of Imperial Companies LLC.
The Company incurred total issuance costs of US$9.7 million. The
details of these costs are as follows:
2018
US$
Placement fees 9,200,000
Legal fees 450,000
Other expenses 66,009
________
9,716,009
15. Financial risk management
The Company's policies with regard to financial risk management
are clearly defined and consistently applied. They are a
fundamental part of the Company's long term strategy covering areas
such as foreign exchange risk, interest rate risk, credit risk,
liquidity risk and capital management.
Financial risk management is under the direct supervision of the
Board of Directors which follows policies covering specific areas,
such as foreign exchange risk, interest rate risk, credit risk, use
of derivative and non derivative financial instruments and
investment of excess liquidity.
The Company does not intend to acquire or issue derivative
financial instruments for trading or speculative purposes and has
yet to enter into a derivative transaction.
Currency risk
The majority of the Company's financial cash flows are
denominated in Pounds Sterling and United States Dollars. Currently
the Company does not carry out any significant operations in
currencies outside the above. Foreign exchange risk arises from
recognised monetary assets and liabilities. The Company does not
hedge systematically its foreign exchange risk.
Credit risk
Credit risk is the risk that a counterparty will not meet its
obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk
from its financing activities, including deposits with banks and
financial institutions. Credit risk from balances with banks and
financial institutions is managed by the Board. Surplus funds are
invested in US treasury bills or such money market fund instruments
as approved by the Non-Founder Directors. The Company has nominal
credit risk related to US treasury bills as they are backed by the
United States government.
Liquidity risk
The Company monitors liquidity requirements to ensure it has
sufficient cash to meet operational needs while maintaining
sufficient headroom. Such forecasting takes into consideration the
Company's debt financing plans (when applicable), compliance with
internal balance sheet ratio targets and external regulatory or
legal requirements if appropriate. The Company's payables are
administrative in nature and due within three months and the timing
of the warrant redemption liability is uncertain according to its
terms as described in note 11.
Cash flow interest rate risk
The Company has no long term borrowings and as such is not
currently exposed to interest rate risk. To mitigate against the
risk of default by one or more of its counterparties, the Company
currently holds its assets in US treasuries. As of 31 October 2018,
US$490.1 million was held in US treasury bills. The Company
anticipates that it will continue to hold the bulk of its assets in
US treasury bills until an Acquisition is consummated. The Board
regularly monitors interest rates offered by, and the credit
ratings of, current and potential counterparties, to ensure that
the Company remains in compliance with its stated investment policy
for its cash balances. The Company does not currently use financial
instruments to hedge its interest rate exposure.
Capital risk management
The Company's objectives when managing capital (currently
consisting of share capital and share premium) are to safeguard the
Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. In order to maintain or adjust the capital
structure, the Company may adjust the amount of dividends paid to
shareholders, return capital to shareholders or issue new
shares.
Directors Legal advisers to the Company
Noam Gottesman (English and US Law)
Michael Fascitelli Greenberg Traurig, LLP
Lord Myners of Truro CBE (Chairman) 8th Floor
Jeremy Isaacs CBE The Shard
Guy Yamen 32 London Bridge Street
London
Registered office SE1 9SG
Ritter House
Wickhams Cay II Legal advisers to the Company
Road Town (BVI Law)
Tortola Carey Olsen
VG1110 Carey House
British Virgin Islands Les Banques
St Peter Port
Administrator and secretary Guernsey
International Administration GY1 4BZ
Group (Guernsey) Limited
Regency Court Depositary
Glategny Esplanade Computershare Investor Services
St Peter Port PLC
Guernsey The Pavilions
GY1 1WW Bridgewater Road
Bristol
Registrar BS 13 8AE
Computershare Investor Services
(BVI) Limited Principal bankers
Woodbourne Hall Barclays Bank Plc
PO Box 3162 PO Box 8
Road Town Library Place
Tortola St Helier
British Virgin Islands Jersey JE4 8NE
Independent auditors
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR LLFEEFLIDFIA
(END) Dow Jones Newswires
February 27, 2019 11:30 ET (16:30 GMT)
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